US Crude Oil Price Marches Higher Despite Report of Output Increase
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US crude oil price, news and analysis:
- Russia and Saudi Arabia struck a private deal in September to raise their oil production to cool rising prices, according to a report by Reuters.
- However, that has done nothing to knock back the price of US crude.
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Oil price shrugs off report of production increase
The price of US crude oil remains firm Thursday despite a report Wednesday by the Reuters newsagency that Saudi Arabia and Russia agreed last month to raise their oil output to combat increasing prices, as called for by US President Donald Trump.
In the report, labelled exclusive and quoting “four sources familiar with the plan”, Reuters said the Russians and the Saudis agreed to keep the deal quiet so as not to look like they were acting on Trump’s orders and also reached the agreement bilaterally before consulting with members of OPEC, the Organization of the Petroleum Exporting Countries, of which Saudi Arabia is a member.
Nonetheless, the US crude oil price reached its highest level Wednesday since November 2014 and so far shows little sign of easing back ahead of US sanctions on Iran, which take effect on November 4.
US Crude Oil Price Chart, Daily Timeframe (April 12 – October 4, 2018)
Nonetheless, the price still looks likely to stabilize at these higher levels, particularly after news that total US commercial crude stocks increased by a hefty 7.98 million barrels to 403.96 million barrels in the week ending September 28, according to the US Energy Information Administration, far exceeding analysts’ expectations of a 2.76 million barrel build.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.